Ventura www.twiw.com Managing
Santa Maria Risk
Claims Management Winter 2010
Getting an injured worker back on the job as quickly as possible
makes good business sense and improves employee morale. How
do you develop a successful return-to-work program? What are the
pitfalls to avoid?
successful return-to-work program turn to work and what duties he or she will
starts with a detailed company plan be able to do. Detailed job descriptions are
that has management support and especially helpful if the injured worker has
has been thoroughly discussed with become disabled, making it relatively easy
employees so that they understand their role to decide whether he can perform his old
in getting well and returning to work. job—with or without accommodation.
Y A process for regular communications.
Three important components Open and regular communications among
of the plan should be: the injured worker, his supervisor, the doc-
Y Job descriptions and analyses for each tor and the insurance company help keep
job. Job descriptions and analyses give doc- the worker’s treatment on track. When
tors and insurance companies the tools to workers know they are missed and that
determine how soon an employee can re- continued on next page
Claims Management Managing Risk • Winter 2010
their managers are concerned about their they return to work. For instance, “physical job. The longer he stays home, the higher the
recovery, they maintain a more positive impairment,” a key part of the ADA defini- chance he will malinger, finding physical rea-
attitude and tend to return to work more tion of disability, now includes major life ac- sons to further delay his return. Immediately
quickly. tivities such as having difficulty in walking, after a worker is injured, his manager should
Y Return-to-work agreement. Using an standing, bending and lifting. use the worker’s job analysis to identify those
agreement that clearly states the respon- Workers with injuries that result in any duties he may be able to perform while he
sibilities of the employer and the injured of those impairments are considered disabled recovers. A return-to-work plan should allow
worker will help employees understand and require reasonable accommodation to him to perform as many of his normal tasks
what they need to do if they are injured. perform their jobs. The workers are also usu- as possible, while augmenting them with
Both the employer and employee should ally eligible to receive a workers’ compensa- other work that will not affect his injury.
sign the agreement. tion disability settlement. Insufficient budget: Some companies
FLMA rules: An injured employee may make the mistake of not adequately funding
Pitfalls to Avoid choose to go on unpaid leave, rather than return-to-work programs. Good programs
Return-to-work programs can be a mine- participate in an early return-to-work pro- have costs. Someone has to manage the pro-
field of problems due to the variety of rules gram. Under FMLA rules, the employer gram, and you might have to hire extra em-
and regulations that apply, including the must accept the leave, and the employee ployees to do part of the injured worker’s job.
Americans with Disabilities Amendment Act retains the right to have her job back after However, return-to-work programs actually
of 2008 (ADAA), the Family Medical Leave returning from FMLA. (The good news is save money because employees are back at
Act (FMLA) and various state workers’ com- that the company can usually stop making work sooner. Savings also come from:
pensation laws. the workers’ comp indemnity payments dur-
ADA issues: ADAA significantly ex- ing the leave.) Y Lowering the odds of expensive
panded the definition of disabilities under Long employee absence: When com- litigation.
the Americans with Disabilities Act (ADA), panies are not able to develop a light-duty Y Reducing claims reserves.
so employers should expect more injured schedule for an injured worker, the worker Y Reducing the injury’s impact on the
workers to be classified as disabled when stays at home until ready to resume his old company’s workers’ comp experience
modification and insurance rates.
Difficulties in following mandatory
medical exams: Companies need to follow
strict guidelines for medical exams that are
used to release employees back to work—for
both full-time and light-duty assignments.
If you would like advice on how to de-
velop a successful return-to-work program,
give us a call.
Loss Prevention Managing Risk • Winter 2010
Workers’ comp fraud costs businesses anywhere from $5 billion to
$7 billion each year. What are the warning signs to look for? How
can you keep your company from being ripped off?
woman who drove a bus for a pri- Any one sign may not indicate a problem,
vate company in California hurt but if you see several, you need to investigate.
her back and went on workers’ Be aware of employees who:
comp leave. After several months
of physical therapy, it looked like she would 4 Do not have a witness to their injury.
have to go on long-term disability. The insur- 4 Delay reporting the injury.
ance company was negotiating a settlement 4 Have discrepancies in their story.
when the employer got a tip: the woman was 4 Are vague on details, and the details
training for a golf tournament and giving change.
golf lessons at a nearby course. A surveil- 4 Report being injured on a Monday.
lance company was hired to video the bus 4 Report an injury just prior to a layoff.
driver’s beautiful swing. She was nailed. 4 Do not return calls. derstand that the claims costs are ultimately
Most cases of workers’ comp fraud are 4 Cancel doctor’s appointments. paid by the company. These expenses affect
not that outrageous. However, some em- profits and can contribute to cost-cutting
ployees seem to have relatively little concern Preventing Fraud measures, especially in a tough economy.
about cheating their employers. According The first place to fight workers’ comp Finally, employees need to know that
to the National Insurance Crime Bureau fraud is on the front line – with your employ- workers’ comp fraud is a felony (in most
(NICB), “opportunistic fraud,” in which ees. They need to believe that the company is states), and that you will prosecute any em-
claimants pad their workers’ comp claims, committed to a safe, healthy work environ- ployees who try to defraud the company.
increased 28 percent in the first quarter of ment. They need to know they are receiving You might want to cite some local statis-
2009. The NICB attributes the increase to good training, so they can perform their jobs tics. For instance, last year California district
the bad economy. in a consistently safe manner. attorneys convicted 527 people of workers’
Next, you need to make sure your em- comp fraud. The typical sentence was a few
Warning Signs ployees understand the role of workers’ comp days in county jail, plus many hours of com-
There are many warning signs that em- insurance and that it represents a significant munity service, several years of probation, a
ployees are committing workers’ comp fraud. cost to the company. Employees need to un- civil fine and restitution of funds.
continued on next page
Liability Managing Risk • Winter 2010
Employees need to know that it doesn’t ing strenuous physical activities or working that track all references to a person – more
pay to commit workers’ comp fraud. If they a second job. thoroughly than a Google search. Some em-
are caught, it’s a felony, it’s embarrassing and In the case of the bus driver who gave ployees brag online about their insurance
they have to repay the money. golf lessons, Patty Kotze, managing partner scams. Others simply provide information
at Diversified Risk Management in Downey, that leads to surveillance.
Investigating Fraud Calif., handled the surveillance. She signed According to Kotze, it is important to
Many insurance companies now use so- up for lessons and then made sure her teach- understand privacy issues when doing a Web
phisticated software to detect fraud as soon er demonstrated how to properly swing the search. “It’s not ethical to become someone’s
as the first notice of loss is filed. When that club. “I had to take several lessons,” Kotze Facebook friend and then investigate their
happens, your carrier may call you before said. “You have to be able to prove that the activities,” Kotze said.
you call them. suspect’s agility was not a one-day fluke – If you suspect fraud, contact our agency
Insurers also hire outside investigators to that she was able to play golf every day.” or your workers’ comp carrier as soon as pos-
conduct legal surveillance of suspected cheats. Some investigators also comb through In- sible. The insurance company will take the
They use GPS, night-vision lenses and other ternet sites such as Facebook to track the ac- lead in investigating, but will need your con-
high-tech electronics to record workers do- tivities of suspects. They use “Web crawlers” tinuing help.
Managing Telecommuting Risks
Telecommuting has evolved from an occasional employee perk to
a mainstream business strategy. Is it right for your company? What
are the risks and how do you manage them?
ore than 12 million people about losing control of workers who would
worked outside their offices at be slacking off at home. However, with the
least once a month in 2008, confluence of high-speed broadband, porta-
an increase of 39 percent in ble devices and increased gas prices, telecom-
two years, according to the WorldatWork muting has taken off.
Institute. Not surprisingly, technology com- Companies like Cisco have formal tele-
panies led the way. A 2006 survey of Cisco commuting programs, but many other com-
Systems employees found that their average panies have ad hoc arrangements that expand
employee telecommuted two days a week. over time, as managers see the advantages.
Originally, many managers were skep- Today, there are three compelling reasons for
tical about telecommuting. They worried telecommuting:
continued on next page
Risk Management Managing Risk • Winter 2010
1 Save money. Telecommuting lowers real
estate and other employee-related costs. Swine Flu and Telecommuting
2 Increase efficiency. Studies show that a
ocial distancing—increasing the 4 Identify which portion of specific job
significant portion of the time saved from
physical distance between people functions can be done at home.
commuting is used for work.
to reduce the spread of disease – is 4 Discuss the plan with all employees,
3 Increase employee morale and retention.
a key phrase in this year’s strategy to min- explaining why some jobs are suitable
Telecommuting employees are generally
imize the spread of the swine flu, H1N1, for telecommuting and others are not.
more satisfied with their work and feel
according to the U.S. Centers for Disease 4 Test the plan with eligible employees
Control (CDC). by having them telecommute several
Depending on the severity of the epi- times prior to their needing to stay
Telecommuting makes more sense for
demic, health officials may recommend home.
companies in which many employees are
closing schools and child care centers, 4 Encourage all employees to stay home
engaged in “heads down” activities such as
canceling large business meetings, spac- when they have the flu.
computer programming, legal research or
ing workers farther apart in the workplace,
graphic design that require relatively little
canceling non-essential travel, and imple- For more information on planning for
interaction with others.
menting work-from-home strategies. the flu season, see www.PandemicFlu.
The Security Risks The CDC also encourages employ- gov.
ers to allow employees to stay home to
Employees working remotely generally
care for family members. Those healthy
have access to company information via a
employees are prime candidates for tele-
company laptop or their own personal com-
Whether or not winter brings an epi-
A 2007 study by Ernst & Young and the
demic of swine flu, companies should
Center for Democracy and Technology found
plan for the worst case. For many that will
that more than 80 percent of respondents al-
mean taking the first steps to develop a
lowed telecommuters to work at home with
proprietary or confidential information.
If you do not have a formal telecom-
Those workers share some of the same secu-
muting program, it is important to imme-
rity risks as employees who travel:
diately assess which employees have job
functions that could be done from home.
Y Physical loss of information or a laptop
Y Access to data by unauthorized people
Y Communication through non-secure
4 Develop guidelines and procedures
that protect the security of company
Home workers pose additional security
property and data.
risks if they:
continued on next page
Risk Management Managing Risk • Winter 2010
Y Store proprietary information on unpro- nect to the company’s network, including Y Electronic fraud—reimbursement for
tected computers. wireless devices and home computers. money stolen through the computer.
Y Print confidential information without Y Use hard token authentication for server
proper disposal. and database access. If you are thinking about making tele-
Y Allow family members to use the com- Y Prohibit downloading unauthorized soft- commuting an important component of
pany’s computer. ware on company computers. your business strategy, give us a call so we
Y Allow others to use critical passwords. Y Provide email encryption if workers use can discuss risk management and your cur-
home computers for work. rent coverages.
What to Do Y Monitor telecommuters’ email and access
If you have employees who telecom- to the Internet and company databases.
mute—even just occasionally—you need to
have a written telecommuting policy that ad-
dresses the specific needs of your company
and the specific activities employees do at
The good news is that having work-
ers telecommute does not generally require
home. You need to: buying any additional insurance coverage or Risk
Y Establish whether employees can handle It is easy to imagine insurance risks for
private or proprietary data remotely. employees working at home – an employee
Y Establish security credentials and access falls down her stairs and has a workers’ comp
controls for remote workers, based on injury, or she drives to the post office and has
their specific needs for access to confiden- a car accident. Those scenarios are rare and
tial information. are generally covered by existing policies.
Y Discourage printing at home, but estab- Regardless of whether your employees are
lish guidelines for disposal. working at home, you may want to look at
Y Prohibit employees from using personal your coverage limits for computer hardware
computers unless security features have and consider optional endorsements that add
been installed. coverage for:
Y Prohibit employees from storing compa-
ny information on their home comput- Y Loss of software, programming and data
ers. caused by viruses
Y Prohibit employees from transferring Y Loss of income due to damaged hardware
data through USB flash drives, unless en- or software caused by viruses
crypted. Y Loss of income due to viral attacks that
Y Use encryption, such as a virtual private overload computers and prevent normal
network (VPN), for all devises that con- business traffic